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Foreclosure filings rise as lawyers adjust to law

Andrew Gomes

The number of foreclosure lawsuits filed against Hawaii property owners continued to creep higher in July as part of what appears to be a gradual rebound following a big drop in May triggered by a tweak to state foreclosure law.

There were 150 foreclosure cases initiated in Circuit Court statewide in July, according to the state Judiciary. That was up from 122 in June and 80 in May.

Prior to May, the number of new foreclosure cases in Hawaii had been about 200 per month going back to June 2013.

Local foreclosure attorneys have said the recent reduction and rebound has to do with local attorneys adjusting to a new requirement governing when they must validate information from lenders used to initiate foreclosure cases in state court.

The Legislature in 2012 required that attorneys affirm in writing that they communicated with a representative of the lender pursuing foreclosure and that they confirmed the accuracy of allegations, any supporting affidavits and notarizations in the lawsuit. The affirmation also requires attorneys to name lender representatives with whom they communicated and on what date.

However, the 2012 amendment to state foreclosure law was silent on when such affirmations had to be filed. As a result, many attorneys were filing the affirmations near the end of the foreclosure process.

This year, lawmakers introduced House Bill 2513 to require that affirmations be submitted with the initial complaint in a foreclosure lawsuit. Gov. Neil Abercrombie signed the bill into law as Act 37 on April 23.

The stated purpose of HB 2513 was to prevent "unwarranted" foreclosure actions, according to reports from the House Judiciary Committee and House Committee on Commerce and Consumer Protection.

However, some local foreclosure attorneys have previously said that they don’t expect the new rule to affect how lenders pursue foreclosure, and that the only change will be a temporary slowdown in filing cases until lenders and attorneys adjust to the new rule.

NO PLACE TO CALL HOME
New Hawaii foreclosure cases filed in state court, including the year-over-year percentage change:

2014

MONTH TOTAL CHANGE
July 150 -36%
June 122 -44%
May 80 -77%
April 211 -47%
March 231 -49%
February 250 -37%  
January 227 -42%

2013

MONTH
TOTAL  
July   . . . . 233
June   . . . . 219
May   . . . . 346
April   . . . . 397
March   . . . . 450
February   . . . . 399
January   . . . . 390

Source: State Judiciary

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